Opportunities for Australia to supply soft wheat for cake and biscuit applications in Asia

Dr Siem Siah, Grains Research Scientist, AEGIC

GRDC Grains Research Updates 2019

Background

• 20-30 years ago Australia produced a limited amount of soft wheat (ASFT), often < 500kt, now <100kt

• Some buyers have expressed interest in purchasing soft wheat from Australia

• ANW is a made up soft-grained wheat developed for production of udon noodles in Japan and South Korea.

In some seasons a portion of noodle wheat does not meet ANW specifications (ANW2).

• What do today’s buyers want/expect from soft wheat including ASFT?

• Is there an opportunity to use ANW2 and possibly ASW for other end use applications?

• This technically based preliminary research project was aimed at:

• Understanding the current soft wheat quality preferences and requirements in selected markets

• Assessing the fit of ASFT and ANW2 in end use applications, with a focus on Japan and Indonesia

Soft wheat – soft texture kernel, low hardness and usually low in protein content

Soft White Winter (SWW) & Western White (WW)

• US Pacific North West (PNW) produced 5.7 Mt of SWW (5 year average)

• Club wheat

• Sub-class of SWW (<6%)

• Blended at least 20% in WW

Mill

ion tonnes

Source: U.S. Pacific Northwest Soft White Wheat Quality Report

PRODUCTION OF SOFT WHITE (SWW)

Nearly 80% of US soft wheat is sold to Asian markets

• Demand for SWW can be considered elastic for many markets owing to its relative price competitiveness and versatility

• Perhaps except for Japan, SWW is also used as a blending wheat when values compete - much like ASW

North Asia61%

South East Asia 15%

MEA10%

Americas7%

Other 7%

US Soft wheat exports 2010 to 2018Average exports 4.78mmt

US Soft White and Club wheat exports ('000 t) 2013/14 to 2017/18 (Average export of 4.5mmt /year)

0

200

400

600

800

1000

1200

1400

Thousand t

onnes

2013/14 2014/15 2015/16 2016/17 2017/18

SWW production is trending slightly downwards over the last decade - at a slightly slow rate than other US wheat classes

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

US Soft White Wheat Production (mmt)

WHEAT, SPRING, WHITE, SOFT

WHEAT, WINTER, WHITE, SOFT

Linear (WHEAT, SPRING, WHITE, SOFT )

Linear (WHEAT, WINTER, WHITE, SOFT )

0

0.5

1

1.5

2

2.5

3

3.5

4

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

191

9

192

4

192

9

193

4

193

9

194

4

194

9

195

4

195

9

196

4

196

9

197

4

197

9

198

4

198

9

199

4

199

9

200

4

200

9

201

4

US Wheat Planted (ha) and Yield (t/ha)

Wheat - Hectares Planted WHEAT - YIELD, MEASURED IN T / Ha

Source: USDA NASS National Stat and Publications from wheat (link from US Wheat Associates web site)

SWW is regularly the cheapest grade of US wheat sold to export markets

• Daily port pricing

data over past

six years has US

SWW (Pacific

North West) at

an average

discount of

• USD29/mt less

than APW

(Kwinana port)$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

1/1

0/2

01

3

1/1

2/2

01

3

1/0

2/2

01

4

1/0

4/2

01

4

1/0

6/2

01

4

1/0

8/2

01

4

1/1

0/2

01

4

1/1

2/2

01

4

1/0

2/2

01

5

1/0

4/2

01

5

1/0

6/2

01

5

1/0

8/2

01

5

1/1

0/2

01

5

1/1

2/2

01

5

1/0

2/2

01

6

1/0

4/2

01

6

1/0

6/2

01

6

1/0

8/2

01

6

1/1

0/2

01

6

1/1

2/2

01

6

1/0

2/2

01

7

1/0

4/2

01

7

1/0

6/2

01

7

1/0

8/2

01

7

1/1

0/2

01

7

1/1

2/2

01

7

1/0

2/2

01

8

1/0

4/2

01

8

1/0

6/2

01

8

1/0

8/2

01

8

Aust vs US FOB wheat values 2013-2018 (USD/mt)SWW ex PNW, APW ex KWN

SWW APW Poly. (SWW) Poly. (APW)

Freight Advantage in Shipping Wheat

2017/18 figures

From Kwinana vs

Vancouver to Jakarta

• Freight advantage -

US$10-15 cheaper

• Shipping durations

– 10 days vs 30

days

US Soft White and Club wheat exports ('000 t) 2013/14 to 2017/18Average export of 4.5mmt /year

0

200

400

600

800

1000

1200

1400

Thousand t

onnes

2013/14 2014/15 2015/16 2016/17 2017/18

Market sizes - IndonesiaSales of Cakes Sales of Sweet Biscuits, Snack Bars and Fruit

Snacks

Source: Euromonitor International

US

D m

illio

n

Market sizes - JapanSales of Cakes Sales of Sweet Biscuits, Snack Bars and Fruit

Snacks

Source: Euromonitor International

Sweet biscuits will drive future demand

To 5 Asia Pacific Countries

2018

sales

(USD billion)

CAGR%

(2018-2023)

China $4.93 3.4%

Japan $4.31 2.8%

India $3.90 6.2%

Indonesia $1.34 7.8%

South Korea $0.94 -0.2%

Other $3.68

Source: Euromonitor International

Approach – collaboration with Asian mills

• Choice analysis – to understand wheat quality preferences

• Technical exchange - to understand wheat quality requirements

INDONESIA JAPAN

• Growing market

• Pays more attention to biscuit

quality – large volume

• Close proximity to Australia

• High value & quality demanding

• Pays more attention to cake

quality – high value product

• Believes if flour performs well in

cakes, will perform well in biscuits

Materials and methods

INDONESIA JAPAN

CHOICE ANALYSIS

• 4 x flour mills (>80% market share) • 5 x flour mills (>80% market share)

• 16 participants (T:12, P:4) • 29 participants (T:20, P:9)

• Market research technique to study how flour mills prioritise wheat quality attributes.

• Survey questions in a statistically balanced design & requires a lower number of participants to

achieve statistical significance than traditional survey methods.

TECHNICAL TRIALS

• Biscuit trials with 2 flour mills (1 of the flour

mills only conducted 1 year study)

• Sponge cake trials with 2 mills.

• Indonesian mills’ in-house QC method. • Japanese mills’ in-house QC method.

• 2016/17 and 2017/18 harvest, from eastern & Western Australia.

Indonesia – biscuit preference

• > 30 attributes analysed

• SRC* values and biscuit spread ratio are the most important for Indonesian mills.

• Physical grain characteristics were least important to technical participants

• Full results must first be considered by project funding providers

*SRC – Solvent Retention Capacity

Japan – cake preference

• Cake sensory properties – ‘melting-in-mouth’ and cake volume are the most important for Japan.

Cake ‘melting-in-mouth’ - a quality of sponge

cake with light, moist and soft texture that

dissolves right away in mouth when chewing

Trial 1 results: Indonesian Mill A

SRC

water

SRC

sucrose

SRC

lactic

acid

SRC

sodium

carbonate

SWW, P=8.3%

SWW, P=10.2%

ASF, P=9.1%

ASE, P=8.6%

ANW2a, P=9.0%

ANW2b, P=8.9%

ASW, P=8.5%

Green shades = fit with SRC specs

Gr a

de

A c

om

me

r ci a

l f l

ou

r

Gr a

de

B c

om

me

r ci a

l f l

ou

r

SW

W,

P=

8. 3

%

SW

W,

P=

10

. 2%

AS

E,

P=

8. 6

%

AS

F,

P=

9. 1

%

AN

W2

a,

P=

9. 0

%

AN

W2

b,

P=

8. 9

%

AS

W,

P=

8. 5

%

0

2

4

6

8

1 0

C o o k i e S p r e a d R a t i o

a

a a aa a

a a

a

Trial 2 results: Indonesian Mill A

Green shades = fit with SRC specs*Same sample from Trial 1

Sample Water SRCSucrose

SRC

Lactic Acid

SRC

Sodium

Carbonate

SRC

SWW*, P=10.2%

ASF, P=7.8%

ASE, P=9.0%

ANW2, P=9.2%

ASW W, P=8.3%

ASW E, P=9.6%

Gr a

de

A c

om

me

r ci a

l f l

ou

r

Gr a

de

B c

om

me

r ci a

l f l

ou

r

SW

W,

P=

10

. 2%

AS

F,

P=

7. 8

%

AS

E,

P=

8. 6

%

AN

W2

, P

=9

. 2%

AS

W W

, P

=8

. 3%

AS

W E

, P

=9

. 6%

0

2

4

6

8

1 0

C o o k i e S p r e a d R a t i o

aa , b

b bb

bb

c

Trial 1 Results: Japanese Mill A

ANW2b

P=9.0%

ASW

P=8.5%

ASF

(2)

WW

P=10.2

%

ASFT

P=9.1%

ANW2a

P=8.9%

Sample ASFT ANW2-a ANW2-b ASW

Volume (cc) 955 963 945 882

Softness Soft Soft Soft Firm

Moistness Moist Slightly less moist Slightly less moist Dry

Smoothness Smooth Slightly not smooth Slightly not smooth -

Ranking 1 2 3 4For illustration purposes only

Trial 2 results: Japanese Mill A

WW

P=10.0

%

ASF W

P=7.8%

ASF E

P=8.9%

ANW2

P=9.2%

ANW1a

P=10%

ANW1b

P=9.5%

Sample WW ASF W ASF E ANW2

Volume (cc) 957.5 937.2 1004 1033

Melt-in-mouth Control Acceptable Acceptable -

Softness Control - Soft Soft

Moistness Control - Moist Slightly less

moist

Smoothness Smooth - Smooth -

Overall

acceptability

Control Marginally

acceptable

Acceptable Acceptable

For illustration purposes only

Trial 1 results: Japanese Mill B

Sample WW ASF ANW2-a ANW2-b ANW2:WW

(50:50)

ANW2:ASW

(50:50)

Volume (cc) 1274 1179 1222 1193 1223 1080

Smoothness Control Soft Soft Soft Soft Soft, cohesive

Melting-in-mouth* Control Bad Slightly bad Slightly bad Slightly bad Slightly bad

Overall

Acceptability

Control Not

acceptable

Marginal

acceptable

Marginal

acceptable

Acceptable Not acceptable

WW, P=8.8% ASF,P=9.1

%WW ANW2a,P=8.9%

WW ANW2b,P=9.0% WW ANW2a:ASW (50:50),P=8.7%

For illustration purposes only

Overall Findings

Indonesia - biscuits Japan – Cakes

• Solvent retention capacity (SRC) and

cookie spread ratio are the most

important quality parameters for

Indonesian mills

• ANW2 and ASFT make cookies with

higher spread ratio than that of ASW and

they were comparable to that of SWW

• Similar to SWW, the SRC values of

Australian soft-grained wheat do not

always meet their quality specification

• Cake textural property i.e. ‘melting-in-

mouth’ and softness, and cake volume

are the most important quality attributes

for Japanese mills

• ANW2 and ASFT produce cakes with

bigger volume than those of ASW and

they were comparable to those of WW

• The cake sensory property of ANW2 and

ASFT was acceptable for one mill but

slightly less acceptable for the other mill

Conclusions

• There is a growing demand for soft wheat in some Asian countries.

• This preliminary quality based research has revealed:

• the quality targets and preferences by market

• there are “some” positive indicators for ASFT and ANW in end use applications using soft wheat

• many current importers are happy with existing product and would need incentive to change

• there are many other factors to consider (e.g. can Australian breeders produce higher yielding soft wheats, future US SWW plantings, projected future demand for soft wheats, etc). Further information will be communicated to stakeholders in coming months

Acknowledgements

• GRDC for providing research funding (GRDC Project Extension AEG006).

• Indonesian and Japanese collaborators.

• InterGrain, LongReach, Stirlings to Coast Farmers, CBH, Premium Grain Handlers P/L, Tony Guiness and Allied Mills for providing samples.

• AEGIC Soft Wheat Team: Dr Ken Quail, Mr Barry Cox, Mr Sean Cowman, Mr Matt Yamamoto, Dr Chris Carter and Dr Siem Siah.

• The technical assistance provided by Mr Daniel Li and Miss Sabrina Lim.

• Mr Peter Elliott, AEGIC, at initial stage of project concept development.